Challenges for a Public Private Partnership in Pakistani Healthcare

Pakistan’s Punjab Province, home to more than 101 million people, has the potential to become one of the world’s largest economies in the twenty-first century. However, a strong economy requires a healthy populace. Despite robust economic growth over the last decade, the Punjab government allocates as low as 0.7 percent of its spending to healthcare, compared to the OECD average of 8.9 percent. Infant mortality in Punjab is 77 deaths per 1,000 live births, and mortality for children under five is 112 in 1,000, compared to the OECD averages of 2.9 and 4.2 respectively. Although Punjab has made a gradual progress on these two health indicators in the last decade, both are still short of the MDG targets of 52 deaths per 1,000 live births for under-five mortality, and 40 deaths per 1,000 live births for infant mortality.

The major issues in Punjab’s health services run the gamut from financial mismanagement to insufficient resources to absenteeism of doctors and other staff. In light of its failure to achieve MDG targets, the government of Punjab announced in June that it will outsource day-to-day operations and management of all public health facilities in 10 districts to private parties starting in November 2015. These locations span from the smallest healthcare facilities to district hospitals, totaling 669 health facilities. The government will continue to own the physical facilities and remain accountable for overseeing the quality of healthcare delivered.

This public-private partnership (PPP) is expected to achieve two important goals: Drastically improve the quality of healthcare services, and continue to provide free treatment and medicine for the poor. Private healthcare providers must agree not to charge poor patients. The government will continue to allocate funds for medicines and salaries for medical staff, including doctors. The table below includes a list of functions that the Punjab government will outsource to private providers.

As it pursues an innovative approach to addressing a critical health problem, there are important questions for Punjab’s government to clarify for the partnership to be successful. The first regards private sector interest and participation. Punjab’s government is currently preparing the final contracting documents and plans to open the PPP for bidding in the coming weeks. Procurement is scheduled for completion by October 31. But under a restricted amount of spending and a focus on low-income patients, will private providers be willing to bid?

A second major challenge is how to attract appropriately trained staff to work in the health facilities; how will these doctors will get paid while not increasing patients’ out-of-pocket payments? Market-based salaries for managers are also necessary to increase accountability for hospital management.

Additionally, under the new scheme, no government-employed medical officers, including doctors, can be fired by the contractors. If such crucial components of employee management are tightly restricted, this may further dis-incentivize private sector participation and compromise performance. Greater flexibility for the contractors is needed to take advantage of the private sector’s effectiveness in achieving higher quality healthcare.

Implementation of a monitoring and evaluation component will also be important to ensuring the PPP’s effectiveness with a limited budget and enabling the government to select and scale up the best private providers. Performance indicators relating to efficiency, quality, and equity measured against a baseline will drive accountability, increase performance, and heighten clinical standards within facilities.

Finally, the Punjab government needs to appoint a new health minister; the former health minister Khalil Tahir Sindhu resigned in 2013 and has not yet been replaced. Strong leadership in the ministry of health is important to ensuring accountability for an effective implementation of this PPP.

In a nutshell, partnerships only work when both parties benefit from the relationship. With clearly delineated responsibilities and distinctive benefits for both the public and private sector, Punjab’s PPP hospitals will provide better healthcare for the province’s citizens. For Pakistan to continue its positive growth trajectory, it needs a strong foundation built by healthy people.

Motoki Aoki is a researcher with the Project on US Leadership in Development.